According to the absolute priority rule, the correct order of distribution in liquidation is:

Employee wages, Administrative expenses of the bankruptcy, Government taxes Unsecured creditors

Question

According to the absolute priority rule, the correct order of distribution in liquidation is:

Employee wages, Administrative expenses of the bankruptcy, Government taxes Unsecured creditors

Quizplus · Accepted Answer

The absolute priority rule dictates that secured creditors are paid first, followed by administrative expenses, employee wages, government taxes, and then unsecured creditors.

According to the Absolute Priority Rule, the Correct Order of Distribution